C.O.G. Chart and Texas RE Law - Posted by Michael

Posted by Michael on February 08, 2000 at 10:51:58:

Thanks Steph…you answered my questions.

“Do on” = “Due on”…I have lots to learn (smile).


C.O.G. Chart and Texas RE Law - Posted by Michael

Posted by Michael on February 07, 2000 at 20:31:08:

Hi there

I’m a newbie and recently began studying C. Sheets’ “No Money Down” course. Would someone with some experience please help me with a couple of questions:

  1. What’s the quick and dirty on “Do on” clauses?

  2. Are there any “Creative Finance - No Money Down Techniques”, as listed on C. Sheets C.O.G. (Creative Options Grid) Chart, that aren’t Kosher with Tx RE law OR simply won’t work in Texas (because of financial institution practices/policies, etc.). If I recall correctly, one message-board participant indicated some banks (or maybe just one bank) in Georgia didn’t think too highly of wrap-around mortgages.

I plan to soon get my feet wet pursuing a single-family property or duplex…but don’t want to make a major boo boo at the git go.

Thanks for your time…Newbie in Dallas

Re: C.O.G. Chart and Texas RE Law - Posted by steph in tex

Posted by steph in tex on February 08, 2000 at 07:43:47:

I’m no pro- but i’ll take a shot at what i make of your questions…

I am assuming that the down and dirty “do on” clause that you are talking about is the ever-popular, hot topic- the “due on sale” clause. Basicly this is a clause in a mortgage that provides, at the option of the lender, that the balance of the note be due immediately once the property is sold or ownership is transfered - otherwise known as an acceleration. Of course there are ways to get around the due on sale clause - don’t let it scare you off, just understand it and what’s it’s implications are. Only then we you be ready to work around it.

As for the wrap- otherwise known as an “AITD” or All Inclusive Trust Deed-does exactly that-wraps all the other liens and encumbrances-- the wrap violates the due on sale clause, and if the notes you’re wrapping have a due on sale clause-your documents need to have a provision outlining what will happen if the loan is called. I like to think of that as my “plan B”… i always have one- even if it just means that i might have to refi and qualify for the loan. Many people don’t like Wraps because your name does go on the loan, and title. Banks don’t like them- I am not aware of banks doing wraps–but i don’t know- maybe they do-but anyway–many attorneys will do them for you, and it is another tool for you. Sometimes thats the one you need.

Once again, education is key- and once you have a good understanding of what each is and means to you, you will then know when to use it. It’s a great ride- enjoy it! Knowledge is power and never before has learning been so easy, information so accessible, and the process so fun.

I hope this helps- good luck
steph in tex

Dallas area RE club - Posted by d.henderson

Posted by d.henderson on February 08, 2000 at 07:26:01:

http://www.aireo.com/index.htm…go here and check it out…I’m too far away in Texas to get to go but a RE Club is a wonderful input of information. They will help you get on the right track for your new RE Investor Business.
Good Luck,

Re: C.O.G. Chart and Texas RE Law - Posted by james Harris

Posted by james Harris on February 07, 2000 at 23:05:01:

Newbie, 1st, a “due on” clause means just that due on. If you have a rental unit, The rent is due on the first of the month. 2nd) Why did or why would any one go to the bank to get a wrap mortgage? A wrap mortgage, basically, cuts the bank out of the process, so to speak. The AITD( All Inclusive Trust Deed), is agreed upon by the seller and the buyer. The bank really does not have a say in the process, they will still recieve the mortgage payments every month. I hope this helps some what.